Making Change

In the mid-1990s, when Congress and the U.S. Mint set out to create a new dollar coin, history was not on their side. The previous effort, the Susan B. Anthony, was such a disaster that the supply from the original print run lasted 20 years. Ironically, that was good enough to make it the most successful dollar in over 200 years of U.S. coinage. 

With the Susan B. Anthony debacle still fresh on the minds of bank officers, the Mint took care to learn the lessons of the S.B.A. when conceiving its successor. The result was the tremendously popular Golden Dollar, whose image has only been slightly tarnished by complaints that it shows wear too quickly. 

To get the inside story on how the Susan B. Anthony impacted the conception of the Golden dollar, Failure interviewed Philip Diehl, former director of the Mint, who oversaw its launch and the well-received 50-state quarters program. Diehl recently left the security of his longtime post for the uncertainty of Internet commerce, accepting a position as president of Zale.com.

What was the motivation for launching the Susan B. Anthony dollar?
I think it reflected the fact that there had not been a successful new denomination coin in a couple of generations, and there was a feeling that the nation's coinage system was being outdated by the inflationary period of the '60s and '70s. Even though there was the Kennedy half-dollar, it didn't circulate because the coin was too big for people to carry around in their pockets. Then the Treasury department and Congress repeated the same mistake in 1971 with the Eisenhower dollar, which was the same size as the large silver dollars of the 19th century.

What was the problem with the Susan B. Anthony? 
When Congress began getting serious in 1995 about launching a new dollar coin, I wanted to make certain that we'd at least learn the lessons of the Susan B. Anthony. So I went back and looked at the research that was done in the mid-'70s—research that the Treasury department presumably relied upon. Number one, it said the coin had to be smaller in size. They got that part right. But it also said it needed to be a different color from the quarter and needed to have a distinctive edge. The research also specified that the Treasury should undertake a major public awareness and marketing campaign. Well, three out of four of those recommendations were ignored. So, sure enough, when the coin came out in 1979 it was immediately beset with problems. The fact that it was so easily confused with the quarter and that Americans did not find it particularly attractive added to the public relations problems.

What was the story behind the design?
Originally, the artwork that the U.S. Mint engraver came up with depicted a less severe S.B.A., but when it got to the Treasury dept. they said, “No, that's not her. You prettified her.” The artist was directed to do a more realistic depiction. In Ken Burns' PBS program on Susan B., he talks about why it is that we have this frozen image in the public mind of a very stern S.B.A. He said that they had gone through thousands of photos looking for a more pleasant expression on her face, and they never found one. Susan B. was committed to being taken seriously and she believed that if she smiled for the camera she couldn't be taken seriously.

Was there anything positive about the Susan B. Anthony?
Well, it was a pretty severe disaster. I certainly think that the choice of S.B.A. herself was completely appropriate and in fact a very strong selection. The nation had never had a woman of history on its coinage and it was high time that we did that. One of the real sad aspects of the failure of the S.B.A. is that it did little to raise the profile and honor the achievements of that remarkable woman. One of the highest tributes a nation can give one of its citizens is to put them on its coinage. In most nations it's reserved for kings and queens and princes, and in the U.S. it has almost always been reserved for presidents.

Do you know if there was a particular moment where it became obvious the S.B.A. was not working out?
It's hard for me because I wasn't around [the Mint] at that time. I think it was clear that it had failed when Ronald Reagan won the presidency in 1980. During the 1980 presidential campaign the S.B.A. was nicknamed the “Carter quarter.” That was a pretty powerful moniker because we had come through a highly inflationary period in the late '70s. Calling it the Carter quarter made reference to the deterioration of the value of the dollar, plus it emphasized the fact that it was being confused with the quarter and that it was conceived on president Carter's watch.

What did the Mint learn from the S.B.A.?
Several things. Number one, the coin had to be easily distinguishable from any other denomination. Thus, the gold color and the distinctive smooth edge. The smooth edge and the wide border were included as features designed to help the seeing-impaired differentiate it. When we began testing it with sighted people we realized that those features, combined with the fact that the coin is 50% heavier, made it easy to pull this coin from a pocket full of change without looking.

The second thing we learned is that you couldn't just put it out on the market and hope for the best. You had to back it up with a strong marketing and public education campaign, and that was mandated by Congress in the legislation that authorized the Golden dollar. 

The third thing we learned is that aesthetics matter. We wanted something that spoke of higher value, so we looked for the 14-18 karat gold color. Also, the balance of the design, the artistry of the design, and the story-telling quotient were all important.

We had a very big challenge on our hands. Coins are distributed to the public through the Federal Reserve Bank and the private banking system. If private banks will not order it, the public will never have the opportunity to accept it or reject it. Our market research indicated that the banks were overwhelmingly skeptical. We talked to 11,000 bank officers, from 4,000 banks, representing 100,000 branches. Most of them told us that they would not order this coin because they did not believe that the public would accept it. So our strategy was to create a coin that was so attractive to the American public that they would demand it.

How did the Golden dollar come to pass?
This is the first circulated coin in the nation's history whose design was not largely mandated by an act of Congress. I say largely because Congress said that the tails side had to be an eagle. When the bill authorizing this coin came out of the House in the summer of '97, it mandated that the Statue of Liberty be on one side. But when it got to the Senate it ran into a brick wall. There were a number of Senators who said, “Wait a minute. We're going to take the only real woman of history that has appeared on the nation's coinage, and replace her with an allegorical figure? We don't think so.” It suggests, of course, that there's no woman who deserves to be on the nation's coinage. So the bill came to a screeching halt in the Senate. The compromise that finally allowed the bill to go to the president's desk was, “We won't mandate anything on the heads side—we're going to leave it to the Secretary of the Treasury to decide.”

Another element that was left to the executive branch and the U.S. Mint's discretion was the metal content. The size of the coin and the gold color was written into law. We asked for that discretion because there was another big challenge that we faced. As weak as the S.B.A. was it began to pick up some momentum in the 1990s as the vending industry and the mass transit system needed a higher denomination coin and began using the S.B.A. By 1999 there were some 15 million vending and mass transit machines that accepted it. Vending machines typically use not just the size and weight of the coin for the identification but they also use the electromagnetic signature of the metal. We were able to find a gold color alloy that met all of our requirements and matched the S.B.A.'s electromagnetic signature. That meant that all those 15 million machines that accept the S.B.A. could accept this coin, and that generated tremendous momentum and enthusiasm in the vending industry. We were able to avoid millions and millions of dollars of retro-fitting.

Was there much controversy over the use of the Indian theme?
There's been very little controversy with the use of Sacagawea. Certainly there has been some good publicity that has been generated by the selection because her story is such a great American story. The choice of Sacagawea really springs from popular culture and the influence that Stephen Ambrose's book “Undaunted Courage” and Ken Burns' program on the Lewis and Clark expedition had on popular culture. Both of those focused a lot of attention on the crucial role that Sacagawea played in the success of the expedition. There are more statues of Sacagawea in this country than any other woman. The power of that story, I'm convinced, has contributed to the success of the coin.

The Mint spent $40 million promoting the coin, is that right?
The $40 million figure was related to the advertising public awareness campaign. About $25 million of that was television. The rest was newsprint, radio, and mass transit ads.

Did you have any concerns about the public having some negative feelings about how much money was being spent?
Sure. But not a penny of that was tax revenue dollars. The Mint operates off its own revenue. The product has an 88-cent profit margin. It costs 12 cents to produce, so they get tremendous return on investment from this $40 million campaign. The profits are returned to the American taxpayer through the general fund of the treasury.

Why do you think Americans have never embraced larger denomination coins?
I think it's because we never got it right. I don't think Americans are especially hard headed about larger denomination coins. I think they will reject physically large coins, but the conventional wisdom that Americans are just too set in their ways to adopt a new coin is wrong.

So what's next, a five dollar coin?
I think it's possible that somewhere down the road we might have a two-dollar coin. In 1987 Canada introduced a dollar coin to great success and within about 5-6 years they introduced the two-dollar coin, which also has been very successful. In the future we'll see higher denomination coins, but I don't think that's anywhere on the immediate horizon.